TOTAL vessel operating costs in the shipping industry are expected to increase by 2.7 per cent this year and by 3.1 per cent in 2019, according to shipping consultant Moore Stephens' latest annual Future Operating Costs Survey.
The poll revealed that drydocking is the cost category likely to increase most significantly both this year and next, accompanied in the latter case by repairs and maintenance. The cost of drydocking is expected to rise by 2.1 per cent in 2018 and by 2.3 per cent in 2019, while expenditure on repairs and maintenance is forecast to go up two per cent in 2018 and by 2.3 per cent in 2019.
The survey also revealed that the outlay on crew wages is expected to increase by 1.3 per cent this year and by 1.9 per cent in 2019, with other crew costs are considered likely to rise by 1.5 per cent in 2018 and by 1.8 per cent in 2019, reported Fort Lauderdale's Maritime Executive.
The cost of hull and machinery insurance is predicted to go up by 1.3 per cent and 1.6 per cent in 2018 and 2019 respectively, while for protection and indemnity insurance the projected increases are 1.2 per cent and 1.4 per cent respectively. Management fees are expected to rise by one per cent in 2018 and by 1.2 per cent in 2019.
The predicted overall cost increases were again highest in the offshore sector, where they averaged 4.1 per cent and 4.2 per cent respectively for 2018 and 2019.
In contrast, predicted cost increases in the bulk carrier sector were 1.8 per cent and 2.6 per cent for the following year. Operating costs for tankers are expected to rise by 2.4 per cent in 2018 and by 2.9 per cent in 2019, while the corresponding figures for containerships are 4.2 per cent and 3.8 per cent.
Respondents to the survey highlighted various areas of concern likely to result in increased operating costs over the next two years.
Regulation was high on the list, with one respondent noting: 'New regulations will lead to extra costs for all owners, for example the Ballast Water Management Convention and IMO's 0.5 per cent global limit on the sulphur content of fuel oil used on board ships.'
Another respondent observed: 'Maintenance in general has been somewhat on hold and we will see a correction in that in 2018 and 2019,' while another predicted, 'we will see an increase in costs for automation and communications, not least because electronics have a shelf life.'
On a more general level, respondents voiced concerns about environmental issues, trade wars, the cost of securing finance and the global economic recession, all of which were perceived to have the potential to result in increased operating costs.
Overall, the cost of new regulation was identified as the most influential factor likely to affect operating costs over the next 12 months, at 23 per cent. Eighteen per cent of respondents identified finance costs in second place and competition ranked in third place at 15 per cent.
The poll revealed that drydocking is the cost category likely to increase most significantly both this year and next, accompanied in the latter case by repairs and maintenance. The cost of drydocking is expected to rise by 2.1 per cent in 2018 and by 2.3 per cent in 2019, while expenditure on repairs and maintenance is forecast to go up two per cent in 2018 and by 2.3 per cent in 2019.
The survey also revealed that the outlay on crew wages is expected to increase by 1.3 per cent this year and by 1.9 per cent in 2019, with other crew costs are considered likely to rise by 1.5 per cent in 2018 and by 1.8 per cent in 2019, reported Fort Lauderdale's Maritime Executive.
The cost of hull and machinery insurance is predicted to go up by 1.3 per cent and 1.6 per cent in 2018 and 2019 respectively, while for protection and indemnity insurance the projected increases are 1.2 per cent and 1.4 per cent respectively. Management fees are expected to rise by one per cent in 2018 and by 1.2 per cent in 2019.
The predicted overall cost increases were again highest in the offshore sector, where they averaged 4.1 per cent and 4.2 per cent respectively for 2018 and 2019.
In contrast, predicted cost increases in the bulk carrier sector were 1.8 per cent and 2.6 per cent for the following year. Operating costs for tankers are expected to rise by 2.4 per cent in 2018 and by 2.9 per cent in 2019, while the corresponding figures for containerships are 4.2 per cent and 3.8 per cent.
Respondents to the survey highlighted various areas of concern likely to result in increased operating costs over the next two years.
Regulation was high on the list, with one respondent noting: 'New regulations will lead to extra costs for all owners, for example the Ballast Water Management Convention and IMO's 0.5 per cent global limit on the sulphur content of fuel oil used on board ships.'
Another respondent observed: 'Maintenance in general has been somewhat on hold and we will see a correction in that in 2018 and 2019,' while another predicted, 'we will see an increase in costs for automation and communications, not least because electronics have a shelf life.'
On a more general level, respondents voiced concerns about environmental issues, trade wars, the cost of securing finance and the global economic recession, all of which were perceived to have the potential to result in increased operating costs.
Overall, the cost of new regulation was identified as the most influential factor likely to affect operating costs over the next 12 months, at 23 per cent. Eighteen per cent of respondents identified finance costs in second place and competition ranked in third place at 15 per cent.